Research Article Published 30 July 2024

The Era of Transparency: Auditor’s Judgement of Key Audit Matter and Audit Quality

How to Cite

How to Cite

Yulianto, A. R., Lokman, N., & Mohd Razali, F. (2024). The Era of Transparency: Auditor’s Judgement of Key Audit Matter and Audit Quality. Journal of Business Management and Accounting, 14(2), 187-211. https://doi.org/10.32890/jbma2024.14.2.1
Ahmad Rudi Yulianto
Universitas Islam Sultan Agung, Indonesia
Norziana Lokman
Accounting Research Institute, Universiti Teknologi Mara, Selangor, Malaysia
Fazlida Mohd Razali
Accounting Research Institute, Universiti Teknologi Mara, Selangor, Malaysia
Full text
PDF View full text 793 KB · 25 pages XML JATS full text 93 KB · machine readable HTML Read online 64 KB
DOI 10.32890/jbma2024.14.2.1 Cite this article
Share this article
Citations
1
OpenAlex, highest of the sources checked
Reads
527
Abstract + full text
Downloads
683 +2
PDF and XML
Percentile
91th
By citations, works of the same year

Article

Abstract

This paper discusses the theoretical influence of key audit matter and audit quality. This paper discusses a literature study method approach to explore the possible impact of key audit matters (KAMs) and audit quality. In particular, the authors believe implementing key audit matters can largely affect audit risk, going concern evaluation and audit response procedures, which in the end can influence on audit quality. Implementation of key audit matters in Indonesia began in 2022, audit firms are strongly advised to prepare better audit working papers and mitigate audit risks. This can help them consider matters that require the auditor's significant attention, which in turn is hoped can increase the flexibility and effectiveness of communication between auditees and auditors. In addition, the author recommends that regulators or audit oversight boards require the application of boards to apply key audit matters to all audit work, not just mandatory for listed companies. It is hoped that this rule will help audit companies work more carefully in dealing with audit risks, which appear to be positively related to audit quality. As far as the author knows, limited educational study has explored the possible influence of key audit matters (KAMs) on audit quality in Indonesia. Therefore, this paper reduces the research gap in the audit literature. On the other hand, this paper can be used as a foundation for developing research instruments (e.g., questionnaires, interviews, or content analysis) to grant empirical evidence.

Keywords
Transparency audit quality communicating value key audit matters

Metrics & impact

Citations by source

Harvested 08-09-2026

Counts differ by index because each source crawls a different corpus. Crossref counts only registered reference lists; Google Scholar includes theses, preprints and grey literature.

OpenAlex
1
Open corpus, updated daily View →
Crossref
1
Deposited reference lists only View →
OpenCitations
0
Open references only View →
Scopus
0 Not indexed
Indexed titles only View →
Google Scholar
Publishes no citation count that can be read automatically.
Includes theses and preprints Search →
Dimensions
Publishes no citation count that can be read automatically.
Includes policy documents Search →

Citations over time

New citations recorded in each year, as reported by OpenAlex.

1
0
2025 2026

Reads & downloads

Abstract views 527
PDF downloads 683
XML downloads 0
Full-text HTML 0
Counted under COUNTER Release 5 rules; known robots excluded.

Attention beyond citation

Citation percentile 91th
Field-weighted citation impact 0.76
Works this article cites 51

From OpenAlex. A field-weighted impact of 1.00 is the world average for work of the same field, type and year. No Altmetric key is configured, so news, policy and social attention are not shown.

Identifiers
DOI · 10.32890/jbma2024.14.2.1
OpenAlex · W4401236076

References

References 62
Deposited to Crossref with the article DOI
  1. Abdullatif, M., & Al-Rahahleh, A. S. (2020). Applying a new audit regulation : Reporting Key Audit Matters in Jordan. International Journal of Auditing, 24(2), 268–291. https://doi.org/10.1111/ijau.12192
  2. Alqam, A., Mohd, Y., Yousef, H., History, A., & Sciences, F. (2021). The Mediating Effects of Key Audit Matters on The Realtionship Between Audit Quality and Earning Management: Evidence From Jordan. Humanities and Social Sciences Letters, 9(4), 403–416. https://doi.org/10.18488/journal.73.2021.94.403.416
  3. Asbahr, K., & Ruhnke, K. (2019). Real effects of reporting key audit matters on auditors’ judgment and choice of action. International Journal of Auditing, 1–16. https://doi.org/10.1111/ijau.12154
  4. Badawy, H.. (2021). The effect of quality and timeliness of limited review report on perceived interim financial reporting quality during COVID-19 pandemic crisis: Evidence from Egypt. Scientific Journal for Financial and Commercial Studies and Research, 2(21), 25–74. https://doi.org/10.21608/ cfdj.2021.146711
  5. Barghathi, Y., Mirani, S., & Khan, N. U. (2021). Audit quality and earnings management after communicating Key Audit Matters (KAMs) in the UAE – audacity and auditors’ perspectives. Accounting And Management Information Systems, 20(2), 173–198. http://dx.doi.org/10.24818/jamis.2021.02001
  6. Bédard, J., Coram, P., Espahbodi, R. & Mock, T. J. (2016). Does recent academic research support changes to audit reporting standards? Accounting Horizons, 30(2), 255–275.
  7. Bédard, J., Gonthier-Besacier, N. & Schatt, A. (2019). Consequences of expanded audit reports: evidence from the justifications of assessments in France. Auditing: A Journal of Practice and Theory, 38(3), 23–45. https://doi.org/10.2308/ajpt-52339
  8. Bepari, M. K., Nahar, S., Mollik, A. T. & Azim, M. I. (2023). Content characteristics of key audit matters reported by auditors in Bangladesh and their implications for audit quality. Journal of Accounting in Emerging Economies. https://doi.org/10.1108/ JAEE-12-2022-0344
  9. Boolaky, P. K., Ghattas, P., Soobaroyen, T. & Marnet, O. (2020). International standards on auditing (ISAs): Conflicting influences on implementation, The Routledge Companion to Accounting in Emerging Economies. 171–183.
  10. Boolaky, P. K. & Quick, R. (2016). Bank directors’ perceptions of expanded auditor’s reports. International Journal of Auditing, 20(2), 158–174. https://doi.org/10.1111/ijau.12063
  11. Boolaky, P. K., & Soobaroyen, T. (2016). Adoption of International Standards on Auditing ( ISA ): Do Institutional Factors Matter ? International Journal of Auditing, 21(1), 59–81. https://doi.org/10.1111/ijau.12081
  12. Botes, V., Low, M. & Sutton, A. (2020). Key audit matters and their implications for the audit environment. International Journal of Economics and Accounting, 9(4), 374–396. https://doi.org/10.1504/IJEA.2020.110164
  13. DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326. https://doi.org/10.1016/j.jacceco.2014.09.002
  14. Delima, A., Ashary, H. M., & Usman, O. (2019). Influence of Service Quality, Product Quality, Price, Brand Image, and Promotion to Consumer Satisfaction Affecting on Consumer Loyalty (Online Shop). Product Quality, Price, Brand Image, and Promotion to Consumer Satisfaction Affecting on Consumer Loyalt. Journal Economics, 1–15. https://doi.org/http://dx.doi.org/10.2139/ ssrn.3308707
  15. Dopuch, N., & Simunic, D. (1980). The nature of competition in the auditing profession: A descriptive and normative view. Regulation and the Accounting Profession, 34(2), 283–289. https://core.ac.uk/reader/234624640
  16. Emilio, J., Kurniani, M., & Yanto, W. (2022). Analisis persiapan Indonesia dalam menerapkan key audit matters. Jurnal Mirai Management, 7(3), 383–391. https://doi.org/10.37531/mirai. v7i3.4589
  17. Francis, J. R. (2004). What do we know about audit quality?. The British Accounting Review, 36(4), 345–368. https://doi.org/10.1016/j.bar.2004.09.003
  18. Francis, J. R. (2011). A Framework for understanding and researching audit quality. Auditing: A Journal of Practice and Theory, 30(2), 125–152. https://doi.org/10.2308/ajpt-50006
  19. Gutierrez, E., Minutti-meza, M., Tatum, K. W., Vulcheva, M., & Tatum, K. W. (2018). Consequences of adopting an expanded auditor ’ s report in the United Kingdom. Review of Accounting Studies, 23, 1543–1587. https://doi.org/10.1007/s11142-018-9464-0.
  20. Hegazy, M. A. A., El-Haddad, R. & Kamareldawla, N. M. (2022). Impact of auditor characteristics and Covid-19 Pandemic on KAMs reporting. Managerial Auditing Journal, 37(7), 2022. https://doi.org/10.1108/MAJ-07-2021-3271
  21. Hu, Z., Li, Y., Lin, B., & Kleinman, G. (2023). The impact of key audit matter reporting on analyst forecast accuracy and forecast dispersion : Evidence from Chinese listed firms. Managerial Auditing Journal, 38(3), 288–313. https://doi.org/10.1108/ MAJ-08-2021-3291
  22. Jensen, M. & Meckling, W. (1976). Theory of the firm: Managerial Behavior, Agency Costs and Ownership Structure. 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
  23. Kachelmeier, S. J., Schmidt, J. J. & Valentine, K. (2017). The Disclaimer Effect of Disclosing Critical Audit Matters in the Auditor’s Report STEVEN (Issue September).
  24. Kilgore, A., Harrison, G., Radich, R., Kilgore, A., Harrison, G., & Radich, R. (2014). Audit quality : what ’ s important to users of audit services. Managerial Auditing Journal, 29(9), 776–799. https://doi.org/10.1108/MAJ-08-2014-1062
  25. Kitiwong, W. & Sarapaivanich, N. (2020). Consequences of the implementation of expanded audit reports with Key Audit Matters (KAMs) on audit quality. Managerial Auditing Journal, 35(8), 1095–1119. https://doi.org/10.1108/MAJ-09-2019-2410
  26. Knechel, W., Krishnan, G., Pevzner, M., Shefchik, L. & Velury, U. (2013). Audit Quality: Insights from the Academic Literature. Auditing: A Journal of Practice & Theory, 32(October 2012), 385–421. https://doi.org/10.2308/ajpt-50350
  27. Köhler, A. G., Quick, R., & Willekens, M. (2016). The New European Audit Regulation Arena: Discussion of New Rules and Ideas for Future Research. Int. J. Audit, 20, 211–214. https://doi.org/10.1111/ijau.12078
  28. Köhler, A., Ratzinger-sakel, N., & Theis, J. (2020). The Effects of Key Audit Matters on the Auditor’s Report’s Communicative Value : Experimental Evidence from Investment Professionals and Non-professional Investors. Accounting in Europe, 17(4), 1–24. https://doi.org/10.1080/17449480.2020.1726420
  29. Krisnanto, U., & Novianti, R. (2019). Examining the Relationships between Service Quality, Corporate Image, Customer Satisfaction, and Customer Loyalty for an Indonesian Bank. Expert Journal of Business and Management, 7(1), 31–35.
  30. Li, H., Hay, D. & Lau, D. (2019). Assessing the impact of the new auditor ’ s report. Pacific Accounting Review, 31(1), 110–132. https://doi.org/10.1108/PAR-02-2018-0011
  31. Li, Hao. (2017). The Benefit of Adding Key Audit Matters to the Auditing Report. 2nd International Conference on Education, Management Science and Economics, 49(1504), 21–24.
  32. Li, Hong, Hay, D., & Lau, D. (2019). Assessing the impact of the new auditor’s report. Pacific Accounting Review, 31(1), 110–132. https://doi.org/10.1108/PAR-02-2018-0011
  33. Maroun, W. (2018). Modifying assurance practices to meet the needs of integrated reporting: The case for “interpretive assurance.” Accounting, Auditing & Accountability Journal, 31(2), 400–427. https://doi.org/https://doi.org/10.1108/aaaj-10-2016-2732
  34. Marques, V. A., Pereira, L. N., Aquino, I. F. d., & Freitag, V. d. C. (2021). Has it become more readable ? Empirical evidence of key matters in independent audit reports, Accounting & Finance Magazine, 32(87), 444–460. https://doi.org/10.1590/1808-057x202112990
  35. Matta, J., & Feghali, K. (2020). Indonesian Management and Accounting Research The impact of Key Audit Matters (KAMs) on financial information quality : Evidence from. Indonesian Management and Accounting Research, 19(02), 135–162. https://doi.org/http://dx.doi.org/10.25105/imar.v19i2.7328
  36. Moroney, R., Phang, S.-Y., & Xiao, X. (2020). When do investors value key audit matters? European Accounting Review, 30(1), 63–82. https://doi.org/10.1080/09638180.2020.1733040
  37. Nguyen, L. A., & Kend, M. (2021). The perceived impact of the KAM reforms on audit reports, audit quality and auditor work practices: stakeholders’ perspectives. Managerial Auditing Journal, 36(3), 437–462. https://doi.org/10.1108/MAJ-10-2019-2445
  38. Pinto, I., & Isabel, A. (2018). What matters in disclosures of key audit matters : Evidence from Europe. Journal of International Financial Management & Accounting, February, 1–18. https://doi.org/10.1111/jifm.12095
  39. Pratoomsuwan, T. & Yolrabil, O. (2020). Key audit matter and auditor liability: Evidence from auditor evaluators in Thailand. Journal of Applied Accounting Research, 21(4), 741–762. https://doi.org/10.1108/JAAR-10-2019-0147
  40. Rahaman, M. M., Hossain, M. M. & Bhuiyan, M. B. U. (2022). Disclosure of key audit matters (KAMs) in financial reporting : Evidence from an emerging economy. Journal of Accounting in Emerging Economies. https://doi.org/10.1108/JAEE-11-2021-0355
  41. Rainsbury, E., Bandara, S. & Perera, A. (2023). Auditors ’ response to regulators during COVID-19: disclosures of key audit matters. Asian Review of Accounting, 31(1), 42–56. https://doi.org/10.1108/ARA-04-2022-0106
  42. Ratzinger-Sakel, N. V. & Theis, J. (2019). Does considering key audit matters affect auditor judgment performance?, Corporate Ownership and Control, 7(1), 196-210. https://doi.org/10.22495/cocv17i1siart4
  43. Rautiainen, A., Saastamoinen, J. & Pajunen, K. (2021). Do key audit matters (KAMs ) matter? Auditors’ perceptions of KAMs and audit quality in Finland. Managerial Auditing Journal, 36(3), 386–404. https://doi.org/10.1108/MAJ-11-2019-2462
  44. Reid, L. C., Carcello, J. V., Li, C. & Neal, T. L. (2019). Impact of auditor report changes on financial reporting quality and audit costs: Evidence from United Kingdom. Contemporary Accounting Research, 36(3), 1501–1539.
  45. Reid, L. C., Carcello, J. V, & Neal, T. L. (2018). Contemporary Accounting Research. Contemporary Accounting Research, 36(3), 1501–1539. https://doi.org/10.1111/1911-3846.12486
  46. Salehi, M., & Azary, Z. (2009). Fraud detection and audit expectation gap: Empirical evidence from Iranian Fraud Bankers. International Journal of Business and Management, 3(10), 65. https://doi.org/10.5539/ijbm.v3n10p65
  47. Segal. (2017). ISA 701: Key Audit Matters-An exploration of the rationale and possible unintended consequences in a South African. Journal of Economic and Financial Sciences, 10(2), 376–391. https://doi.org/https://doi.org/10.4102/jef.v10i2.22
  48. Segal, M. (2019). Key audit matters: Insight from audit experts. Meditari Accountancy Research, 27(3), 472–494. https://doi.org/10.1108/MEDAR-06-2018-0355
  49. Shakhatreh, M. Z., Alsmadi, S. A., & Alkhataybeh, A. (2020). The effect of audit fees on disclosure quality in Jordan. Cogent Business & Management, 7(1), 1-15. https://doi.org/10.1080/2 3311975.2020.1771076
  50. Shamsuddin, A., & Masdor, N. (2020). Impact of Key Audit Matters (KAMs) Disclousure on Audit Quality: Malaysian Perspective. European Proceedings of Social and Behavioural Sciences, 100, 67–72. https://doi.org/10.15405/epsbs.2020.12.05.8
  51. Shoztic, K., Bible, W., Nelson, E. & Stein, S. (2016). Developing tomorrow’s auditor. Financial Executive, 32, 40–44.
  52. Sirois, L. -P., Bédard, J. & Bera, P. (2018). The informational value of key audit matters in the auditor’s report: Evidence from an eye-tracking study. Accounting Horizons, 32(2), 141–162.
  53. Smith, J. E. & Smith, N. P. (1971). Readability: A measure of the performance of the communication function of financial reporting. The Accounting Review, 46(3), 552–561.
  54. Suttipun, M. (2021). Impact of key audit matters (KAMs) reporting on audit quality: Evidence from Thailand. Journal of Applied Accounting Research, 22(5), 869–882. https://doi.org/10.1108/ JAAR-10-2020-0210
  55. Suttipun, M. (2022). External auditor and KAMs reporting in alternative capital market of Thailand. Meditari Accountancy Research, 30(1), 74–93. https://doi.org/10.1108/MEDAR-04-2020-0850
  56. Velte, P. (2020). Associations between the financial and industry expertise of audit committee members and key audit matters within related audit reports. Journal of Applied Accounting Research, 21(1), 185–200. https://doi.org/10.1108/JAAR-10-2018-0163
  57. Vinson, J. M., Robertson, J. C. & Cockrell, R. C. (2019). The effects of critical audit matter removal and duration on jurors’ assessments of auditor negligence. Auditing: A Journal of Practice and Theory, 38(3), 183–202. https://doi.org/10.2308/ ajpt-52319
  58. Wei, Y., Fargher, N. & Carson, E. (2017). Benefits and costs of the enhanced auditor’s report: Early evidence from Australia.
  59. Wuttichindanon, S. & Issarawornrawanich, P. (2020). Determining factors of key audit matter disclosure in Thailand. Pacific Accounting Review, 32(4), 563–584. https://doi.org/10.1108/ PAR-01-2020-0004
  60. XRB. (2017). Key audit matters: A stock take of the first year in New Zealand. http://fma.govt.co.nz/news-and-resources/reports- and-papers/monitoring-and-compliancereports/%0Akey-audit-matters-a-stock-take-of-the-first-year-in-new-zealand/
  61. Yuniarti, R. (2011). Audit firm size, audit fee and audit quality. Journal of Global Management, 2(1), 84–97.
  62. Zeng, Y, Zhang J. H, Zhang J & Zhang, M. (2022). Key Audit Matters Reports in China : Their Descriptions and Implications of Audit Quality. Accounting Horizons ·, 35(2), 167–192. https://doi.org/10.2308/HORIZONS-19-